A profit and loss statement, usually shortened to P&L, shows what a business earned and what it spent over a period, and what was left. It always covers a span of time — a month, a quarter, a year — never a single moment.
How it is built
Revenue at the top, which is why it is called the top line.
Minus the cost of doing the work — materials, and the labour on the job. What remains is gross profit.
Minus overhead — rent, insurance, admin, software, the costs that continue whether or not you sell anything. What remains is net profit, the bottom line.
The order matters. The two subtractions answer different questions: the first asks whether the work is priced correctly, the second asks whether the business can carry itself.
What it does not tell you
A P&L does not tell you whether you have money. It is entirely possible to show a strong profit and be unable to make payroll, because profit counts work you have done and money owed to you counts work you have not been paid for.
For what the business is worth at a moment rather than what it earned over a period, see the balance sheet.
Reading one honestly
Two habits catch most problems. Compare against the same period last year rather than last month, because seasonal work makes month-to-month comparison meaningless. And look at gross and net separately — they move for different reasons and a single "profit" number hides which one changed.